The Connersville Redevelopment Commission held a special meeting to discuss the recently passed Tax Increment Financing (TIF) district.
The TIF District had been a point of concern amongst county government as well as the school district, whom each asked for the process to be slowed down so there could be a better understanding of it at the December meeting where it passed.
City Controller Adam Stone was brought into the RDC meeting, which was an open forum for representatives present from county council, county commissioners and the Fayette County School Corporation to ask questions about TIF.
The biggest concerns for all of the entities present would be how collected TIF dollars would impact their own financial viability.
“Where’s it going to sit with county council this year the county highway department cut our budget $161,000, We have an air handler that needs work,” County Council member Robert Stewart said. “We put off building a new jail for $30 or $40 million this year by moving the women over to that facility (women’s work release and jail annex building) They also turned that into a security system where we have to pay for the jailers to take care of the ones that are incarcerated. Where’s that going to come from if we get no increases?” (in funding)
Stone said that all of the taxing entities in the area, the schools, county and city are all at the circuit breaker as far as their taxes go, and all are losing potential tax money that they need now. It was his opinion that there were only two ways to remedy that, either getting more people in the community that are taxpayers, or bring in more business that bring in revenue. This is where TIF comes in.
“You have to either grow AV (assessed valuation) and you have to be able to grow your property tax revenue,” Stone said.
Stone said he wanted to explain as clearly and as openly as possible, while acknowledging that TIF laws are some of the most complicated in the state codes. Stone said that the concern from the county and schools that they would not see any growth because of the new TIF were at least partially unjustified.
“Each year through the AV growth quotient each of you receive property tax revenue,” Stone said. “Your fiscal officers get an email from the state auditor that says you can grow levy at a set percent this year. So, your county revenue systematically, regardless of caps, regardless of AV’s each year gets that opportunity; that’s guaranteed growth for all of us. It’s not a lot, but it’s guaranteed growth. The only other way to increase that is that your assessed valuation goes up enough that your tax rate falls, so that you can go out and tap the debt market so you can raise money to repay it from that rate.”
Fayette County School Corporation School Board President Leslie Jacobs asked if TIF funds, which would be captured by the Redevelopment Commission would be divided by the RDC to the taxing bodies. Stone said that was an accurate assessment. Stone also said the RDC is required by law to give annual presentations to regarding the status of the TIF, and at the request of the other impacted entities have the presentation taken to their board meeting.
Stone said it was required in the presentation to say where the money is going, how much they expect to receive and how they chose to keep the funds or divide them among the other taxing bodies.
Stone said the RDC is required to announce how much funding the will release to the base if they do give away funds to other taxing entities.
Stone said it was his opinion that if the RDC does it’s job as statutorily stated, the other taxing entities would not lose any money as a result of the TIF, as the TIF is only supposed to capture funds for development that would not happen but for the creation of the TIF.
Stone said from his experience the most successful TIF districts come from entities working and communicating together to create collaborative projects that are beneficial to all parties.
“I would highly recommend the Redevelopment Commission and you all consider that (creating a collaborative projects agreement) so that you can answer your question and it not be speculative,” Stone said. “Here’s the form, put the request on paper and here’s the process things can be heard.”
Stone said if other entities question decisions made by the RDC, their best course of action would be to contest it with the State Board of Accounts.
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